Compensation
Arapien
4 Posts
Our current CEO has a current contract that outlines his compensation. However, within the contract, it states that the CEO will be paid for overtime hours beyond 40 hours per week. Annually, the CEO submits 300-400 hours of overtime compensation. Is the CEO putting himself at risk with this type of compensation structure?
Comments
What kind of risk are you thinking? If you mean under FLSA, you can always pay an "exempt" person as non-exempt, which is sounds like is happening here. That doesn't affect the exemption at all. It's only the other way around (trying to pay non-exempt as exempt) that gets companies into trouble.
But what a cushy contract. There is always the risk that other employees will find out that he gets extra for his overtime and ask for it too, but that isn't really a legal risk...more just morale risk.
[quote user="Arapien"]Our current CEO has a current contract that outlines his compensation. However, within the contract, it states that the CEO will be paid for overtime hours beyond 40 hours per week. Annually, the CEO submits 300-400 hours of overtime compensation. Is the CEO putting himself at risk with this type of compensation structure?[/quote]
The CEO is putting the company at risk. If he leaves and claims that he was paid on a time basis rather than on a salary basis, things can get ugly. He can claim he under-reported his hours so as not to be fired by the board, and all the other things that come up (just insert "the board" where it might otherwise say "the evil supervisor" or "the nasty, mean company.")